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Federal input screens

Screen Cr - Dependent Care, CTC/ODC, Sch R, Foreign Tax Credit (1040)

Overview

Use this screen to enter information to complete Form 2441, Child Tax Credit and Credit for Other Dependents, Schedule 8812, Schedule R and some Foreign Tax Credit information.

Form 2441 - Child and Dependent Care

Use this section to enter child and dependent care expenses to complete Form 2441. UltraTax CS uses the information that you enter here and in the
Dependents
 statement in the 1040 screen in the calculation of the deductible and excludable amount.
Use this statement to enter each provider's name, address (including foreign address information, if applicable), Social Security number or Employer Identification number, tax-exempt status, and amount paid. This statement also allows you to identify when the expenses were incurred and paid, and if there is any employer-provided care. If the employer furnished the care, enter code
3
, then enter the employer's name as the provider in the Provider's Business Name column. UltraTax CS reports the employer's name in column (a) and prints "See W-2" in column (b) on line 1 of the Form 2441. If the employer paid a third party on the taxpayer's behalf (rather than furnishing child care or hiring a care provider), enter code
1
 then enter the provider's complete information. The
Amount Paid
 field should include the amount the employer paid to the third party. The statement information is used to determine the limitation amounts and the deductible amount. Enter the amounts paid for each dependent in the 1040 screen in the
Dependents
 statement.
Enter the qualifying person's first name, last name, Social Security number, qualified expenses incurred and paid, indication if disabled, and their complete date of birth (MM/DD/YYYY) in the
Nondependents
 statement. The information is reported on Form 2441, Page 1.
Complete this field if the total expenses incurred and paid in 2023 from the care provider statement is not equal to the total qualified expenses incurred in 2023. Enter the total amount of expenses incurred in 2023, regardless of when the expenses were paid. The amount in this field overrides calculated amounts for Form 2441, Part III.
Enter
X
 in this field if the taxpayer meets all the requirements to be treated as unmarried for purposes of determining the credit and exclusion on Form 2441. If the taxpayer does not meet all the requirements when filing as married filing separately, leave this field blank. The taxpayer can only take the exclusion (see Form 2441, Page 2, Part III). The taxpayer is not eligible for the credit and UltraTax CS does not calculate this amount.
When certain conditions are met, this field allows for the selection of a qualified person to appear on Form 2441, line 2 with no qualified expenses. A person selected in this field will appear on line 2 of Form 2441, if another qualifying person for Form 2441 is entered in the
Dependent information
 statement on the 1040 screen or the
Qualifying person information for nondependents
 statement on the Cr screen with more than $3,000 of qualifying expenses. See Form 2441 instructions or IRS Pub. 503 for further information.
Qualified persons will appear in this field under these conditions:
  • The person is entered in the
    Dependent information
     statement on the 1040 screen or the
    Qualifying person information for nondependents
     statement on the Cr screen, and
  • The
    2441 Expense
     column in the
    Dependent information
     statement on the 1040 screen is blank or the
    Qualified Expenses
     column in the
    Qualifying person information for nondependents
     statement on the Cr screen is blank, and
  • The person is under age 13, or
  • The person is over age 13 but considered disabled (code 2 or 3 in the
    Student/Disabled
     column of the
    Dependent information
     statement on the 1040 screen, or
    X
     is entered in the
    Mark if Disabled
     column of the
    Qualifying person information for nondependents
     statement on the Cr screen).
Enter the amount of dependent care benefits received from a sole proprietorship (Schedule C and/or F). Amounts entered here will transfer to Form 2441, line 12. If any of the dependent care benefits from a sole proprietorship are deductible on Form 2441, line 24, the amount of dependent care benefits to report on the applicable Schedule C or Schedule F activity will need to be manually calculated and entered in the applicable activity's input screen (C-2 or F-2 screens) for expenses.
Earned income normally calculates based on information entered elsewhere in UltraTax CS. If the taxpayer and/or spouse was a full-time student or disabled at any time in 2023, you must manually enter the earned income in the appropriate field. In addition, if the filing status is married filing separately and the taxpayer is not considered unmarried for 2441 purposes, enter the spouse's earned income in this field.
Earned income normally calculates based on information entered elsewhere in UltraTax CS. If the taxpayer and/or spouse was a full-time student or disabled at any time in 2023, you must manually enter the earned income in the appropriate field.

Child Tax Credit & Credit for Other Dependents

Use this section to enter information needed for the Child Tax Credit and Credit for Other Dependents (Schedule 8812 – Credits for Qualifying Children and Other Dependents). UltraTax CS automatically determines if there are qualifying children in the return and marks the applicable boxes in the Dependents section of Form 1040 and calculates Scheule 8812, Credits for Qualifying Children and Other Dependents, which includes the Additional Child Tax Credit.
A custom paragraph may be included in the transmittal letter to notify the taxpayer if a child will no longer qualify for the child tax credit next year (thus potentially increasing tax liability), based on age requirements. To select this custom paragraph on a client basis, select custom paragraph
CTC Eligibility Expiration (TL)
 from one of the
Paragraph Description
 fieldviews in the Letter screen. To select this custom paragraph to print for all clients when applicable, choose Setup > 1040 Individual, select the Letters & Emails button in the Federal tab, select the Custom Paragraphs tab, and mark the
CTC Eligibility Expiration (TL)
 box.
Qualifying children are defined by the IRS as any individual under age 18 with a valid SSN at the end of the 2023 tax year, for whom the taxpayer can claim a dependency exemption, and who is (a) the taxpayer's son, daughter, adopted child, stepchild, or grandchild; (b) the taxpayer's brother, sister, stepbrother, stepsister, or a descendant of the taxpayer's brother, sister, stepbrother, or stepsister (for example a niece or nephew) for whom the taxpayer cared for as their own child; or (c) an eligible foster child of the taxpayer. The child must also have a valid SSN issued prior to the due date of the return (including extensions).
A qualifying person for the credit for other dependents (ODC) must be claimed as a dependent on the return, cannot be used to claim the CTC or ACTC, and must be a U.S. citizen, U.S. national, or U.S. resident alien. In addition to being a qualifying person for the ODC, the person must have an SSN, ITIN, or ATIN issued on or before the due date of the return (including extensions). If the person has not been issued an SSN, ITIN, or ATIN by that date, they are not considered eligible for the ODC.
Enter
X
 to suppress the automatic application calculation of the child tax credit and Schedule 8812, Additional Child Tax Credit.
Enter
X
 to suppress the automatic application calculation of the credit for other dependents.
Enter the amount of the adjustment to the calculated modified adjusted gross income. A negative entry is treated as a subtraction.
  • Amount of Puerto Rico income excluded
     – Use this field to complete Schedule 8812, Credits for Qualifying Children and Other Dependents, line 2a.
  • Amount from Form 4563, Exclusion of Income Bona Fide Resident of American Samoa, line 15
     – Use this field to complete Schedule 8812, Credits for Qualifying Children and Other Dependents, line 2c.
Enter the amount of the adjustment to the calculated taxable earned income on line 7 of the Child Tax Credit - Taxable Earned Income Worksheet. A negative entry is treated as a subtraction from taxable earned income.
Tier 1 tax withheld for railroad employees entered in the
Box 14
 field in the W2 screen for the child tax credit calculation are automatically included. If the railroad employee is an employee representative, enter 50 percent of the total Tier 1 tax and Tier 1 Medicare taxes paid in this field to override the calculated amount.
Bona fide resident of Puerto Rico for 2021 Taxpayer/Spouse
 – Use these fields to complete Schedule 8812, Credits for Qualifying Children and Other Dependents, line 13B.

Schedule R - Credit for the Elderly or Disabled

Enter
X
 to indicate that the taxpayer or spouse is permanently and totally disabled. UltraTax CS uses this information in conjunction with the date of birth entered in the 1040 screen, General Information, to mark the appropriate boxes in Parts I and II of Schedule R.
Enter
X
 to indicate to the IRS that a physician statement has not been filed with a prior year income tax return. Marking this box will clear the box on Schedule R, Part II, when appropriate.
Enter the total nontaxable pension, annuities, or disability income that the taxpayer and spouse received in the current year. The amount transfers to Schedule R, Part III, line 13b.
Enter the total taxable disability income for the taxpayer and spouse, if this amount was included as wages. This amount transfers to Schedule R, Part III, line 11.
If one spouse was 65 or older and the other spouse was under 65 but permanently and totally disabled, enter only the taxable income of the spouse who was under 65. Five thousand dollars is automatically added to the amount and transfers it to Schedule R, Part III, line 11.

Form 1116 — Foreign Tax Credit

This selection is ignored when "Elect exemption from foreign tax credit limitation" is selected on the B&D screen. When both are selected, neither a deduction nor a credit is calculated.
UltraTax CS automatically displays "US" in the
Resident of (name of country)
 country code field on Form 1116 (and also in the electronic file) if these fields and the
Foreign country code/name
 fields on the 1040 screen are blank.
Use this field to override (force) the calculated amount reported in the
Gross income from all sources
 field on Form 1116, Page 1. The details of the calculated amount print in a supporting statement.
Use this field to override (force) the calculated amount of itemized deductions. The Schedule A medical deductions, real estate taxes, personal property taxes and sales taxes are included automatically. You can enter
0
 (zero) in this field if no amount of deductions should appear.
The deductions for health savings account, penalty on early withdrawal of savings, alimony paid, IRA contributions, Archer MSA contributions, jury duty pay and student loan interest are included automatically. If other deductions not definitely related to a specific type of income needed to be included, add them to any amount already automatically included and enter all of the items in this statement.
Deductible home mortgage interest is apportioned automatically using a gross income method and the details print in a not required statement. If the foreign income does not exceed the $5,000 limit and the client wants to allocate all of the interest expense to the U.S. source income, enter
0
 (zero) in this field.
The selection applies to the taxpayer's method of keeping books, and not the reporting entity. For example, a taxpayer may receive a K-1 with accrued foreign taxes but report them on Form 1116 as "paid." Once a taxpayer elects the accrual method, they must use that method for all categories of income for the current year and all future years.
The amount entered here is reported on Form 1116, page 2, Part IV, line 34, instead of on line 12. In the description column, enter the details for how the reduction was calculated. Per the Form 1116 instructions for line 12, this is to be figured by multiplying the credit otherwise allowable by the international boycott factor (calculated on Form 5713 Schedule A).
This election, which allows you to use the exchange rate on the date paid rather than the average exchange rate, applies to accrued foreign taxes dominated in a foreign currency and prints automatically with the return (and is included in the electronic file).
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